The Impact of Economic Policy Uncertainty on Systemic Risk in the Fintech Industry: Evidence from Crisis Events and the COVID-19 Pandemic

Aktham Maghyereh and Jinxin Cui
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Jinxin Cui: School of Statistics and Mathematics, Zhejiang Gongshang University, Hangzhou, China

Financial Economics Letters, 2024, vol. 3, issue 1, 40-51

Abstract: This paper investigates the effect of economic policy uncertainty (EPU) on the systemic risk of the fintech industry. To achieve this goal, we first estimate the evolution of system-wide systemic risk using the CatFin method. We further examine whether EPU significantly affects systemic risk. Our findings demonstrate that the systemic risk of the fintech industry is time-variant and sensitive to major crisis events. Systemic risk tends to increase after major crises, especially the outbreak of the COVID-19 pandemic. EPU has a considerable impact on systemic risk, notably during periods of turmoil.

Keywords: Fintech industry; Systemic risk; CatFin; Economic policy uncertainty; COVID-19 (search for similar items in EconPapers)
Date: 2024
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